Ben Kramer-Miller
Gold & precious metals, macro, research analyst, deep value

Virginia Mines: This Darling Among Gold Bulls Is More Speculative Than You Think

My goal in this article is to dispel the illusion that Virginia Mines (OTCPK:VGMNF) is a safe way to get exposure to gold. The company has several qualities that would lead one to such a conclusion.

    Virginia Mines has thwarted the downtrend in gold-related equities trading up roughly 3% YTD. By comparison the Market Vectors Gold Miners ETF (NYSEARCA:GDX) has lost nearly half of its value. Virginia Mines has $40 million in cash and no debt. Virginia Mines employs the royalty business model, which minimizes risk insofar as it has fixed costs while mining companies have to deal with fluctuating mining costs and mine development/shutdown costs. Furthermore, the company's primary royalty--that on the Eleonore project ...
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